Agency Expansion Plan

"I’m based in San Francisco and on United Airlines,” says AKQA chairman Tom Bedecarré, sitting in the client lounge at his agency’s New York office. “That’s what I like to say.”

It’s a laconic but revealing answer to a question about how often the fifty something advertising exec visits his company’s various locations, which now number 11 thanks to the addition this year of outposts in Atlanta, Paris, Portland, Ore., and Tokyo. Meanwhile, offices in Brazil and other emerging markets are being discussed for next year.

As a matter of fact, expansion is as much of the story at AKQA right now as the creativity-meets-technology identity on which the digital shop built its name—expansion in its account roster as well as its geographic footprint. This year, AKQA won lead digital duties for Gap, Verizon Wireless, Google+, Jordan and Anheuser-Busch, helping net revenue soar 22 percent to an estimated $230 million. And AKQA became the talk of the Cannes Lions International Festival of Creativity this past summer when news broke that the agency, after more than a decade as an independent shop, was selling to WPP Group for some $540 million.

“The four expansions were in the works before we started having conversations with [WPP CEO] Sir Martin [Sorrell] and the crowd in London,” says Bedecarré, dressed in a suit jacket and jeans.

While eager to chat about San Francisco-area sports—especially Rose Bowl-bound Stanford—the ad vet riffs mostly on the current state of digital media. Since starting his career at Ogilvy & Mather three decades ago, Bedecarré has evolved into a Silicon Valley mainstay. Ernst & Young named him 2012 Entrepreneur of the Year for the Northern California region.

“It’s not that we are just creating a mobile app for clients like Delta—we are trying to recreate their business for a mobile world,” Bedecarré says of one of his key clients.

AKQA’s growth symbolizes the larger marketing community’s slow but sure embrace of the fast-paced mind-set of digital, driven by social and mobile innovation. But as Bedecarré is quick to point out, the ad world is still advancing at a snail-like pace compared to consumers.

"I don’t think anyone is changing fast enough,” he says. “Facebook isn’t changing fast enough, Hewett-Packard isn’t changing fast enough. I think the changes—especially in mobile and social, and the big tsunami of data that is coming—are just more than the advertising industry has kept up with.”

Even as mobile and social startups nip at AKQA’s heels, both disciplines happen to be a major factor in this year’s revenue bump at the agency—including the recent revamp of Delta’s smartphone app.

Bob Kupbens, vp of marketing and digital commerce at Delta, tapped AKQA three years ago immediately after coming over from Target, where he had employed the agency’s creative and technical talents.

In addition to its mobile work for Delta, the agency did a simple redesign of the airline’s boarding passes by implementing a font-size hierarchy—erasing visual friction by making the most integral information also the most prominent. Quite simply, AKQA made it easier for travelers to read the most important information on their itineraries. Simple yes, but also smart.

"I’m based in San Francisco and on United Airlines,” says AKQA chairman Tom Bedecarré, sitting in the client lounge at his agency’s New York office. “That’s what I like to say.”

It’s a laconic but revealing answer to a question about how often the fifty something advertising exec visits his company’s various locations, which now number 11 thanks to the addition this year of outposts in Atlanta, Paris, Portland, Ore., and Tokyo. Meanwhile, offices in Brazil and other emerging markets are being discussed for next year.

As a matter of fact, expansion is as much of the story at AKQA right now as the creativity-meets-technology identity on which the digital shop built its name—expansion in its account roster as well as its geographic footprint. This year, AKQA won lead digital duties for Gap, Verizon Wireless, Google+, Jordan and Anheuser-Busch, helping net revenue soar 22 percent to an estimated $230 million. And AKQA became the talk of the Cannes Lions International Festival of Creativity this past summer when news broke that the agency, after more than a decade as an independent shop, was selling to WPP Group for some $540 million.

“The four expansions were in the works before we started having conversations with [WPP CEO] Sir Martin [Sorrell] and the crowd in London,” says Bedecarré, dressed in a suit jacket and jeans.

While eager to chat about San Francisco-area sports—especially Rose Bowl-bound Stanford—the ad vet riffs mostly on the current state of digital media. Since starting his career at Ogilvy & Mather three decades ago, Bedecarré has evolved into a Silicon Valley mainstay. Ernst & Young named him 2012 Entrepreneur of the Year for the Northern California region.

“It’s not that we are just creating a mobile app for clients like Delta—we are trying to recreate their business for a mobile world,” Bedecarré says of one of his key clients.

AKQA’s growth symbolizes the larger marketing community’s slow but sure embrace of the fast-paced mind-set of digital, driven by social and mobile innovation. But as Bedecarré is quick to point out, the ad world is still advancing at a snail-like pace compared to consumers.

"I don’t think anyone is changing fast enough,” he says. “Facebook isn’t changing fast enough, Hewett-Packard isn’t changing fast enough. I think the changes—especially in mobile and social, and the big tsunami of data that is coming—are just more than the advertising industry has kept up with.”

Even as mobile and social startups nip at AKQA’s heels, both disciplines happen to be a major factor in this year’s revenue bump at the agency—including the recent revamp of Delta’s smartphone app.

Bob Kupbens, vp of marketing and digital commerce at Delta, tapped AKQA three years ago immediately after coming over from Target, where he had employed the agency’s creative and technical talents.

In addition to its mobile work for Delta, the agency did a simple redesign of the airline’s boarding passes by implementing a font-size hierarchy—erasing visual friction by making the most integral information also the most prominent. Quite simply, AKQA made it easier for travelers to read the most important information on their itineraries. Simple yes, but also smart.

The agency also helped tie the new boarding passes seamlessly into Delta’s countless airport kiosks, which were also revamped this year.

Such projects may seem like small potatoes. But to client Kupbens, that no-improvement-is-too-small approach sets AKQA apart from other agencies.

“There’s just a coolness and a spirit about them that, I think, is unique,” he says. “It’s not that there aren’t individuals in agencies like that around the world, but everyone we’ve met from AKQA pushes us and constantly asks questions in a way that helps get the best product.”

From Kupbens’ perspective, there’s no sign the digital shop has lost its edge since getting a big new parent. “

I think it would be dumb if you were WPP and you spoiled that thing, that essence of what AKQA is,” he says. “We’ve seen their same team; we’ve seen the same results. I still feel like they have that independent mind-set and that ‘Let’s focus and it will all come out in the end’ approach.”

AKQA’s work this year for Nike is also emblematic of the ethos Kupbens describes. Through the Xbox’s motion-sensory Kinect technology, the agency has turned the everyday exercise routine into a branded experience for the shoe company. Xbox users can use the sports juggernaut’s training program to employ the same workouts used by the likes of tennis star Rafael Nadal and Olympic gold medalist sprinter Allyson Felix.

“It turns your living room into a training club,” says Rei Inamoto, AKQA’s chief creative officer. “And it is not about creating a campaign that ends after a couple weeks or so. When it comes to a brand or a marketer investing in software-based things, it’s like the difference between buying a house instead of merely renting one.”

Ajaz Khowaj Quoram Ahmed, CEO and founder of AKQA (an acronym of his name), says Nike’s software-based initiatives cost less than some :30s. “And they just show how the right kind of product can help deliver a higher order of magnitude and greater connection than a normal advertisement,” he says. “We are trying to create ideas that have real resonance.” The Nike and Delta work underscore how marketers are looking more and more to digital agencies to provide branded utilities with which consumers can interact.

Ahmed sees brands moving toward becoming platforms of their own. “We believe that marketing and products have converged,” he says. “The most visible expression now for brands is digital. The key is to create ideas and services that either have emotional resonance or some kind of utility or entertainment.”

Adds Bedecarré: “I think people are burnt out about ads. I think the generation of digital natives is very savvy about how to avoid ads. They have a cynical view of ads. It’s an app world. They want utility and value and embrace it when they get it.”

Such thinking is central to AKQA’s work for Verizon Wireless, its biggest account win in 2012. In July, Bedecarré’s agency lured Sung Chang, former executive creative director at Ogilvy & Mather, to lead the Verizon account, in large part due to his reputation as a gadget enthusiast. Stopping short of detailing specifics, Bedecarré hints that a digital makeover of Verizon Wireless stores could be in the works. “The proof will be in the pudding next year more than this year,” he says.

And yet the AKQA exec draws back the curtain a bit more on what his agency’s got going on the automotive front.

I think the screen in your car is going to be the next big device people are going to be talking about,” he says. “It won’t just be the odometer or the radio station you are looking at. And we are deeply involved with that kind of work with Audi, for example. Car apps, if you will.”